Vatican officials are expected to
vigorously fight a suit stemming from problems at insurers once associated with
the financier Martin Frankel.

The suit, filed in federal
district court by Mississippi Insurance Commissioner George Dale, claims the
Holy See violated the federal Racketeer Influenced and Corrupt Organization Act
in connection with the disappearance of more than $200 million that has been
alleged to have been masterminded by Frankel.

Damages could reach $600
million.

A ruling on a dismissal is
expected this summer.

A Vatican spokesman has denied the church
profited from business dealings with Frankel or accepted funds he stole.

Historically, the Vatican has fought U.S. suits by claiming sovereign
immunity. But this case focuses on the Vatican Bank's involvement.

Lee Harrell, deputy
insurance commissioner, says the commissioners in Arkansas, Mississippi, Missouri,Oklahoma and Tennessee "thought long and hard"
before taking such action.

"Any lawsuit is very
important but suing the Vatican was something the commissioners combined and
the staff they brought in debated back and forth and based on the facts
presented with thought it was something we needed to do," he says.

Frankel fled to Europe in 1999. He was extradited and pled
guilty 3 years later in Mississippi to stealing $208 million in 5
states.

Just before Frankel's
mansion burned down in 1999 along with much of the evidence in the
case, Dale summoned Frankel and lawyers and priests with Vatican ties to discuss the case.

The previous year Frankel
had formed a bogus charity known as the St. Francis of Assisi Foundation that
ultimately was used to funnel more than $434 million in bogus insurance company
policies.

Frankel's connection with
the Vatican was New York attorney Thomas Bolan,
who introduced him to a number of financial figures in Rome.

Harrell says that at one
point shortly before the scam broke he noticed that 3 insurers were purchased
by St. Francis but never filed proper "change of control" forms.

An attorney for the Mississippi department said that even if the Vatican did not profit from the St. Francis
connection officials there still could be held responsible if they were aware
of a conspiracy.